Evergrande Offers Retail Investors Three Payment Options

What’s new: Debt-ridden China Evergrande Group offered three options Monday to repay retail investors in its high-yield wealth management products after hundreds of them protested overdue payments Sunday.

Investors can accept cash installments, property or investors’ payables on residential units they have purchased, according to the plan announced by Du Liang, head of Evergrande’s wealth management unit.

“It is difficult for Evergrande to make 40 billion yuan ($6.2 billion) of repayments at once for the wealth management products at this moment,” Du said. Investors can expect returns as soon as Evergrande’s property projects are sold, Du said.

Evergrande was responding investors’ concerns about their investments in products offered by Evergrande Wealth Management Co. The company failed to repay some products due Sept. 8, investors said.

The context: Hundreds of investors gathered at Evergrande’s headquarters in Shenzhen late Sunday, demanding a meeting with Du concerning their investments.

The episode underscored the escalating debt woes of the property giant, one of the most indebted such companies in China. As of June 30, Evergrande had 240 billion yuan of debt due within a year, down 28.5% from the end of 2020 but still far exceeding the company’s cash holdings of 86.8 billion yuan, according to a company financial report.

Evergrande Wealth Management proposed a plan Sept. 9 to repay investors through cash installments within five years. But investors widely opposed the plan.

Quick Takes are condensed versions of China-related stories for fast news you can use. To read the full story in Chinese, click here.

Contact reporter Han Wei (weihan@caixin.com) and editor Bob Simison (bobsimison@caixin.com)

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